THE HATCHER REPORT JANUARY 2022 A MONTHLY HOUSING MARKET REPORT BY SOVEREIGN REALTY & MANAGEMENT
IN THIS ISSUE January 2022 Monthly Insights & Statistics What Does this Data Mean for You? 6 Things Causing Low Housing Inventory in Atlanta
Monthly Insights & Statistics JANUARY 2022 Our “new normal” has arrived, at least for a very long while. It’s worth noting that 2022 will be the first year of somewhat normalized housing data, in that it’s not being compared to 2020, the year impacted by the global pandemic. Carrying over from the strong trend at the end of last year, sales continue to show year over year decline as the inventory that’s making it to the market just isn’t sufficient to meet demand. This means with inventory continuously falling short, prices are naturally going to keep going up. Buyers, please take note: It’s going to take a long time for supply to catch up, which means it’s only going to get more expensive to buy, not less. Coupling that with rising interest rates, the spending power for buyers is decreasing, which will have big impact on affordability. The lower the interest rate, the more house buyers can qualify for, on the contrary, the higher the interest rates, the less house buyers can qualify for. However, Atlanta remains a hot market with high demand and the growth is great for our city. It will take collaboration from all real estate industry sectors public and private to work together to ensure everyone is maximizing their efforts to increase housing inventory to meet the demand.
DEMAND: January residential sales were at 4,289, a decrease of 8.8% from the previous year. This decrease is again due to low inventory.
Annual Comparison January 2022
January 2021
% Change
Total Home Sales
4289
4702
-8.8%
Median Sales Price
$375,000
$305,000
23.0%
Average Sales Price
$438,500
$375,000
16.9%
Monthly Comparison January 2022
December 2021
% Change
Total Home Sales
4,289
6,514
-34.2%
Median Sales Price
$375,000
$377,000
-0.5%
Average Sales Price
$438,500
$444,000
-1.2%
SUPPLY: Atlanta area housing inventory totaled 6,240 units in January, a decrease of 24.2% from January 2021. New listings totaled 6,166, down 12.3% from January 2021 and up 24.1% from the previous month. The month’s supply over a 12-month period decreased to 0.9 months. With inventory at 0.9 month’s supply, that is historically the lowest inventory on record for metro Atlanta. For comparison, a healthy housing market is between 4-6 months of supply. Anything above 6 months is a “Buyer’s Market” due to large inventory, and anything below 4 month’s is considered a “Seller’s Market”. Less than a month’s supply of inventory will continue to keep prices high.
Largest Metro Counties Sales Comparison Total Units Sold
Median Sales Price
Average Sales Price
Cobb
690
$380,000
$422,500
Dekalb
669
$335,000
$412,500
Fulton
1,063
$377,000
$513,000
Gwinnett
783
$377,500
$412,500
PRICE: Average and median sales prices continue to outpace 2021’s figures, with positive gains. The median sales price in January was $375,000, an increase of 23.0% from last January. The average sales price was $438,500, up 16.9% from the previous year. However, for the first time in many months, metro Atlanta showed a decrease month over month for December 2021 and January 2022 where the median sales price decreased by -0.5% to $375,000 and average sales price decreased by -1.2% landing at $438,500. I’ll keep watching but I do not expect this to be a trend.
Atlanta REALTORS® Association (ARA), the largest association of its kind in Georgia, released its January 2022 Market Brief on residential housing statistics for 11 area counties in metropolitan Atlanta. The Market Brief, compiled by First Multiple Listing Service (FMLS), provides the only regionally-focused synopsis of monthly sales and home prices for single-family residential properties. Atlanta REALTORS® Market Brief is designed to offer an overview of the Atlanta residential market by providing a synopsis of sales and home prices, and covers 11 counties: Cherokee, Clayton, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Fayette, Henry and Paulding. The numbers in the reports are updated each month to reflect any additional recordings from the previous month. Each month, the numbers reported for the previous month are updated to reflect additional recordings.
What Does This Data Mean for You? BY KAREN HATCHER, CPM®
With "more of the same "Seller's market ahead, buyers and sellers should take the following tips to prepare for success: 1. Plan Carefully - For anyone considering buying or selling in the coming year, it’s going to be important to plan carefully. Keep your personal financial hygiene in order so when the right home comes along, you are ready to go.
2. Hire a reputable REALTOR® - I cannot stress this enough, although it may seem straightforward, it’s not a time to try to go it alone. We expect more consumers to choose to work with a professional REALTOR® as the market gets increasingly nuanced throughout this year.
3. Give Yourself Some Time - Prepare for the journey ahead and know that it could take you a month or a year+ to find the home for you. 4. Be Flexible – If the home checks most of the boxes, but not all, could you add those items in over time or make it a DIY project? You may have to adjust your expectations and focus on what absolutely matters the most to you.
6 Things Causing Low Housing Inventory BY KAREN HATCHER, CPM®
Our city's economic engine has done incredible work recruiting businesses here, but where are they going to live? Low supply of housing will create a housing crisis here in Atlanta. Here is my opinion on what is causing it: 1. Low building materials supply from the pandemic, has created delays and inflation in costs. Materials have not yet caught up with demand which is delaying housing projects from being completed. 2. Many single-family home builders have moved to the Build-Rent model which is reducing the number of new constructions homes that would typically hit the market for sale. This new revenue stream for builders will continue to put pressure on for sale new construction housing market by reducing the number of new construction units that will be available for sale. 3. Millennials are purchasing homes, however as first-time home buyers, they do not add to the available housing inventory for sale because they do not have a house to list. 4. On the contrary, mover-uppers, empty-nester downsizers do have a home to list as they move up or downsize, however they do not have a place to move to due to the low inventory, so they are staying where they are. 5. First-time investors that are financially able to hold onto their first home and still purchase their next home are choosing to rent their current home instead of selling it to take advantage of the future appreciation of the growth in the city of Atlanta. Not selling their first home does not add to the available housing inventory stock, as it traditionally would have. 6. Delays in city permit processing – There continues to be a delay in city housing permit processing for builders to renovate and build new construction homes. Our local government must understand that their inability to efficiently process applications for permits delays project starts, reduces inventory which ultimately increases housing prices, reduces housing affordability.